Bitcoin Falls, Ethereum Rises... "New All-Time Highs"

European Investment Bank Issues Ethereum-Based Bonds... Driving Upward Trend
Advantages Include Usability in Various Digital Transactions Like NFTs
Some Point Out Instability of Cryptocurrencies Such as Ethereum

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] While Bitcoin prices have stalled, the cryptocurrency Ethereum has surpassed $2,800 for the first time ever, setting a new all-time high.

According to CoinDesk on the 29th (local time), Ethereum briefly broke through the all-time high of $2,800 and has since been fluctuating around the $2,700 range. Meanwhile, Bitcoin has maintained a level of around $53,600, down about 2.2% compared to 24 hours earlier.

This new high for Ethereum came after the European Investment Bank (EIB) announced plans to issue digital bonds based on the Ethereum blockchain platform the previous day. The EIB, whose shareholders are member countries of the European Union (EU), plans to issue digital bonds with a maturity of two years worth 100 million euros (approximately 134.3 billion KRW).

This announcement has led to expectations that Ethereum adoption by financial institutions will spread widely and be integrated into the formal financial system, driving Ethereum’s price upward. Danny Kim of cryptocurrency company SFOX said, "The EIB’s announcement has spread positive expectations that financial institutions will use Ethereum."

In particular, Ethereum is seen as having more advantages than Bitcoin because it enables various types of transactions, unlike Bitcoin, which may lead to wider usage in the future.

The advantage of Ethereum that its advocates focus on is the "Smart Contract." Ethereum has its own programming language, and developers can create applications through coding using it. With these applications, developers can create virtually any type of contract, which is what smart contracts are. Since developers can directly code the terms and conditions of contracts, in principle, all kinds of contracts imaginable by humans can be implemented through Ethereum. This advancement in blockchain technology is why Ethereum is also called Blockchain 2.0.

A good example of this is NFTs (Non-Fungible Tokens). NFTs, a rapidly emerging form of digital asset, assign unique identification values to digital products such as images, videos, and tweets, granting ownership rights to these digital products. Since most NFTs are developed and traded based on the Ethereum platform, requiring only developer coding, they can facilitate trading of various digital products.

Unlike Bitcoin, which is typically used only as a currency for financial transactions such as remittances, Ethereum is a technology that implements all possible transactions in the digital realm as well as financial transactions.

Additionally, continuous technological development is underway to shorten Ethereum’s long transaction times and reduce power consumption, which have been pointed out as its drawbacks. This increases the likelihood that Ethereum will gain a more advantageous position than Bitcoin. Environmental groups have previously criticized Bitcoin for excessive power consumption in mining, labeling it as one of the main culprits of environmental pollution.

Simon Peters, an analyst at cryptocurrency trading platform eToro, said, "As Ethereum develops further, investor inflows will continue to increase. Especially for institutional financial institutions looking to reduce dependence on Bitcoin and diversify cryptocurrency assets, Ethereum is the most attractive asset."

As a result, there are claims that Ethereum could surpass Bitcoin to become the number one cryptocurrency by market capitalization in the future. Peters said, "In a few years, Ethereum could surpass Bitcoin’s market cap. Bitcoin recorded a market cap of $5 billion in its sixth year after launch, but Ethereum reached a market cap of $300 billion in six years."

[Image source=Reuters Yonhap News]

On the other hand, some voices point out the instability of cryptocurrencies, saying that Ethereum’s outlook is overly optimistic.

Susanna Streeter, Chief Market Analyst at Hargreaves Lansdown, said, "The value of cryptocurrencies including Ethereum is still in the realm of imagination. Ethereum’s recent rise is largely due to investor word-of-mouth and has not been recognized for its actual value."

Also, Canadian businessman Kevin O’Leary said in an interview with CNBC, "While Bitcoin maintains its status as digital gold, Ethereum will forever remain in the position of silver," adding, "Ethereum is likely to be used only as a means of financial transactions."

This content was produced with the assistance of AI translation services.